Determination of the price of a bond is a present value computation in the same manner as that demonstrated previously in the coverage of intangible assets. Here, a single cash payment of $20,000 is to be made by the debtor to the bondholder in two years. The parties have negotiated an annual 6 percent effective interest rate. Thus, a portion of the future cash ($20,000) serves as interest at an annual rate of 6 percent for this period of time. In a present value computation, total interest at the designated rate is calculated and subtracted to leave the present value amount. That is the price of the bond, often referred to as the principal. Interest is computed at 6 percent for two years and removed. The remainder is the amount paid for the bond.
alabama payday loan license
quick cash loan
quicken loan address
payday loan debt solution
quick loans el paso tx
cash loan Massachusetts
payday loans pocomoke md
direct lender loan
online payday loans laws virginia
easy loans group
cash time loans
texas payday loan legislation
instant payday loan
instant loans online today
online loan pre qualification
a loan
payday loans online phoenix az
payday loan jail
personal loan centers in los angeles
easy online payday loans
payday loans hattiesburg mississippi
payday loans in nevada missouri
payday loan oakdale mn
payday loan consolidation in kansas
payday loan buffalo wy
iowa payday loan stores
payday loan cedar city utah
texas payday loans
online 1 year loan
Although the bond was sold to earn 6 percent annual interest, this rate is not reported for either period. Year One: $1,100 interest/$17,800 principal = 6.2 percent Compounding of the interest raises the principal by $1,100 to $18,900 Year Two: $1,100 interest/$18,900 principal = 5.8 percent In reality, the parties established an annual rate of 6 percent for the entire two-year period. When applying the straight-line method, this actual rate is not shown for either year. Furthermore, the reported interest rate appears to float (6.2 percent to 5.8 percent) as if a different rate was negotiated for each year. That did not happen; there was a single 6 percent interest rate agreed-upon by the debtor and the creditor. The straight-line method does not reflect the reality of the transaction. However, it can still be applied according to U.S. but only if the reported results are not materially different from those derived using the effective rate method.
cash loans tennessee
cash loans warren ohio
ace cash loans virginia
title loans online north carolina
applying for a loan online
money to loan
apply loans
payday loans vidor texas
cash loan kenosha wi
money lending
online payday loans in delaware
cash advance loan online
instant cash loans online now
quick cash loans idaho falls
cash advance loans bloomington mn
payday loans hawaii online
cash advance las vegas nv
online title loans in alabama
payday loans houston tx 77040
fast cash no credit check
get cash loan in 1 hour



Payday Loans

© 2015 All rights reserved.

Make a free websiteWebnode